Canada Home Prices Down 0.2% in February

Following two consecutive months of no change, new home prices were down 0.2 percent across Canada, according to February data from Canada Statistics. This was the first decrease at the Canada level since July 2010. Recent mortgage rate increases along with tighter mortgage regulations are likely contributors to the decline.

Builders in Toronto reduced their prices by 0.6 percent in February, citing unfavourable market conditions. This was the second consecutive decline, and the largest for this census metropolitan area (CMA) in eight years.

Also in the Greater Golden Horseshoe, builders in both Oshawa and Hamilton reported price decreases of 0.1 percent for new houses, while prices in Guelph and Kitchener–Cambridge–Waterloo were unchanged.

All four surveyed CMAs in Alberta and Saskatchewan registered price declines in February. Builders tied the decreases to lower negotiated selling prices. According to the Canada Mortgage and Housing Corporation, the inventory of newly completed and unsold single-family dwellings rose in three of the four CMAs in February 2018 compared with the same month a year earlier. Single-family dwellings include row, single and semi-detached houses.

House prices were unchanged for a second consecutive month in all three CMAs in British Columbia.

Of the six CMAs reporting higher new house prices, Montréal (+0.6 percent) had the largest increase. Builders cited higher construction costs as the main reason for the gain.

Year-over-year comparisons fared better. New home prices rose 2.6 percent year over year in February, with Vancouver (+9.1 percent) and London (+7.1 percent) recording the largest 12-month gains.

New house prices in Toronto increased 2.8 percent year over year.

Among the five CMAs reporting declines, Saskatoon recorded the largest 12-month decrease (-2.0 percent).